June 16, 20170

What Happens After You Declare Bankruptcy

Posted by:Charles Bosse onJune 16, 2017

 

Bankruptcy is not a decision that should be taken lightly. There are some major financial implications involved and your financial freedom will be constrained for many years to come. This doesn’t mean that filing for bankruptcy is the end of the world though. It should actually be considered as the first step in securing a bright financial future for you and your family. Millions of individuals declare bankruptcy each year and most of them have the capacity to buy homes, cars and attain credit cards after they’re discharged. Along with this, understanding what life is like after you have filed for bankruptcy will evidently give you insight into making better financial decisions in the future.

 

Ultimately, once you have filed for bankruptcy, you surrender control of your finances and assets to a Trustee in exchange for protection against litigation that may be taken by your creditors. Once the legal process has been completed, you’ll be undischarged for a certain period of time (in most cases 3 years) after which time you’ll become discharged, which indicates that the financial limitations you sustained during bankruptcy are lifted. Once discharged, your name will permanently appear on the public record (NPII) as a discharged bankrupt. What this article aims to achieve is to give you an understanding of what happens after you declare bankruptcy and what options you’ll have after you become discharged.

 

You Can’t Leave The Country Without Permission

 

One of the drawbacks of declaring bankruptcy is that you can’t exit the country while you’re undischarged unless you seek permission from your Trustee. To do this, you’ll have to provide a lot of information regarding your destination, length of stay, contact numbers, and the reasons for your travel. It’s an offence to travel overseas without prior approval from your bankruptcy Trustee, and in most cases will increase the duration of your undischarged bankruptcy to at least five years as opposed to three.

 

You Will Be Offered Credit Straight Away

 

One thing that surprises lots of discharged bankrupts is that they will immediately be offered credit by a variety of lenders. The main reason behind this is that you won’t have the capacity to declare bankruptcy again for a lengthy period of time, so lenders understand that they have a good chance of getting their money back if you secure a loan. In some situations, acquiring a loan and making timely repayments will help improve your credit rating, which will aid you in the recovery process. But be cautious, you don’t want to take every offer thrown in your direction as some financial institutions are very dubious and include hidden fees and charges that can put you in debt again immediately. The trick is to rebuild your credit rating gradually.

 

Buying A Home Is Certainly Possible

 

There’s a frequent misconception that once you file for bankruptcy, you will no longer have the capacity to attain credit for a mortgage. This is certainly not the case. Whilst bankruptcy will leave you with a bad credit rating, you can still buy a home if you’re able to rebuild your credit within a couple of years, you pay all your bills on time, and you display a responsible use of credit. Of course, you won’t be able to get a mortgage straight after you’re discharged, so it’s paramount to build your credit score intelligently before even envisioning securing a mortgage.

 

Check Your Credit On A Regular Basis

 

Most financial specialists advise that discharged bankrupts should take a look at their credit report at least twice a year. After initially declaring bankruptcy though, it’s paramount that you look at your credit report monthly for at least the first 6 months into your bankruptcy. Some creditors may still be requesting payments even though you are not required to make payments on any debts that were discharged in the bankruptcy process. So to stay clear of any further difficulties, it’s pressing that you keep an eye on your credit report to ensure it’s accurate and up to date.

 

Though bankruptcy isn’t the ideal situation to be in, it doesn’t mean that your financial future is permanently restricted. There are some severe financial limitations imposed on people that declare bankruptcy, but after they become discharged and slowly rebuild their credit history, they’re completely capable of securing a bright financial future. Acquiring a mortgage and other credit lines will be possible a couple of years after discharge if the recovery process is well-planned and implemented. Thus, it’s essential that you seek professional advice from bankruptcy experts to assist you in the process, as bankruptcy is quite complicated and there are many factors to must be taken into account to ensure a smooth recovery process. If you’re thinking of declaring bankruptcy, reach out to Fresh Start Solutions Melbourne on 1300 818 575 or visit their website for more information: http://freshstartsolutions.com.au/bankruptcy-melbourne

 

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